management contract for provision of water and wastewater by pl0rfFN

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                                        WATER AND SEWERAGE COMPANY




                                         MANAGEMENT CONTRACT
                                           FOR THE PROVISION OF
                                      WATER AND WASTEWATER SERVICES




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                              Water Management Agreement - Example 4
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                                          GENERAL CONDITIONS


ARTICLE 1 - CONTRACT AND INTERPRETATION
1.1                 Definitions
               Unless the context otherwise requires, the following terms wherever used in
this Contract have the following meanings:
“Applicable Law” means the laws and any other instruments having the force of law in the [
], as they may be issued and in force from time to time including, but not limited to any
decree of the President or government of the [country];

“Authorities” means [                     ];

“Contract” means the agreement between the Employer and the Operator which consists of
the Contract Documents;

“Contract Documents” means the Form of Contract, General Conditions and all Appendices
to the General Conditions;

“Contract Year” means a continuous period covering a full 365 days, 366 days in leap years,
the first Contract Year to begin on the Starting Date;

“Effective Date” means the date on which this Contract comes into force and effect pursuant
to GC Section 2.1;

“Foreign Currency” means any currency other than the currency that constitutes legal tender
in [ ];

“Local Currency” means the [               ];

“Management Fixed Fee” is defined in GC Section 6.2.1;

“Management Staff” mean those persons directly employed by the Operator to carry out the
Services as set out in the Management Staff Appendix;

“Member” means, any one of the entities forming the joint venture if the Operator is a joint
venture;

“Operations Staff” is defined in GC Section 4.4;

“Operator” means the water and wastewater operator retained by the Employer to carry out
the Services and is the party named as the Operator in the Form of Contract.

“Party” means the Employer or the Operator, as the case may be, and “Parties” means both
of them;

[Note: For all joint venture participants to be “parties” this definition will be
amended.]
“Performance Standards” is defined in the Performance Standards Appendix;




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“Services” means the work to be performed by the Operator pursuant to this Contract, as
described in the Services Appendix;

“Starting Date” is defined in GC Section 2.3.1 and the Contract Particulars Appendix;

“Subcontractor” means any entity to which the Operator subcontracts any part of the
Services in accordance with the provisions of GC Section 3.8 and, for the purpose of this
Contract, also includes any entity which the Operator enters into contracts with on behalf of
the Employer in accordance with the Contract;

“Subsequent Operator” means the operator which is to assume the provision of the Services
upon termination or completion of the Contract and may include one of the Authorities; and

“Third Party” means any person or entity other than the Employer, or the Operator.

[Note: For joint venture participants to be “parties” this definition will be amended.]
1.2                     Contract Documents
       (1)     Subject to the Form of Contract provisions, all documents forming part of the
Contract, and all parts thereof, are intended to be correlative, complementary and mutually
explanatory. The Contract shall be read as a whole.1
       (2)     The following appendices which are incorporated by reference into the
Contract shall be referred to as follows:
                        Appendix “1” – Contract Particulars (the “Contract Particulars Appendix”)
                        Appendix “2” – Description of the Services (the “Services Appendix”)
                        Appendix “3” – Description of the Facilities (the “Facilities Appendix”)
                        Appendix “4” – Description of the Service Area (the “Service Area
                                      Appendix”)
                        Appendix “5” – Procurement Policies (the “Procurement Appendix”)
                        Appendix “6” – Performance Standards (the “Performance Standards
                                      Appendix”)
                        Appendix “7” – Management, Supervisory and Technical Staff (the
                                      “Management Staff Appendix”)
                        Appendix “8” – Staffing Policy (the “Staffing Policy Appendix”)
                        Appendix “9” – Performance Incentive Compensation (the “Incentive
                                      Compensation Appendix”)
                        Appendix “10” – Operator’s Proposal (the “Proposal”)
                        Appendix “11” – Performance Security (the “Performance Security
                                        Appendix”)
                        Appendix “12” – Operating Investment Fund Program (the “Operating
                                        Investment Fund Appendix”)
                        Appendix “13” – Bank Guarantee for the Management Fixed Fee Advanced
                                        Payment (the “Bank Guarantee Appendix”)
                        Appendix “14” – Charter of the Water and Sewerage Joint Stock Closed
                                        Company (the “Employer Charter”)




1
    there is no indication as to priority of documents in the event that there is an inconsistency between any of the contract documents




       PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)                            Victoria Rigby Delmon, LEGPS
       http://www.worldbank.org/ppp                                                                                                 September 2007
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1.3                 Interpretation
1.3.1               Language
                This Contract has been executed in both the English language and the [ ]n
language. The binding and controlling language for all matters relating to the meaning or
interpretation of this Contract shall be the English language. Notwithstanding that the
language of the Contract is English, the Operator shall have a full and complete ability to
communicate, orally and in writing, in [ ]n either by itself or through translators or
interpreters paid for by the Operator.
1.3.2               Persons
             Words importing persons or parties shall include firms, corporations, and
government entities.
1.3.3               Headings
                    The headings shall not limit, alter or affect the meaning of this Contract.
1.3.4               Singular or Plural
                In these Contract Documents the singular shall include the plural and the
plural shall include the singular except where the context otherwise requires.
1.3.5               Entire Agreement
               This Contract constitutes the entire agreement between the Employer and the
Operator and supersedes all communications, negotiations and agreements, whether written
or oral, made by either the Operator or the Employer prior to the Effective Date.
1.3.6               Amendment
                No amendment or other variation of the Contract shall be effective unless it is
in writing, is dated, expressly refers to the Contract, has been approved by the body legally
authorized in accordance with the Applicable Law to make such an amendment or variation
on behalf of the Employer, and is signed by a duly authorized representative of each Party to
the Contract.
1.3.7               Independent Contractor
        (1)    The Operator shall be an independent contractor in its performance of the
Contract. The Contract does not create any agency, partnership, joint venture or other joint
relationship between the Parties hereto.
        (2)    Subject to the provisions of the Contract, the Operator shall be solely
responsible for the manner in which the Contract is performed. All employees,
representatives or Subcontractors engaged by the Operator in connection with the
performance of the Contract shall be under the complete control of the Operator and nothing
contained in the Contract, or in any subcontract awarded by the Operator, shall be construed
to create any contractual relationship between the Operator’s representatives or
Subcontractors and the Employer. The relationship between the Operator, Employer and the
Operations Staff shall be governed by the Staffing Policy Appendix.
      (3)    Notwithstanding that the Operator is an independent contractor, the parties
acknowledge that,

                    (a)      when the Operator incurs expenditures to be paid, in accordance with
                             the Contract, for day to day operations and maintenance of the



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                           Facilities in the Service Area or with respect to the Operating
                           Investment Fund, it does so on the Employer’s behalf; and

                  (b)      When the Operator is carrying out the Services it does so on the
                           Employer’s behalf.
1.3.8             Joint Venture or Consortium
                If the Operator is a joint venture or consortium of two or more persons, all
such persons shall be jointly and severally bound to the Employer for the fulfilment of the
provisions of the Contract and shall designate one of such persons to act as a leader with
authority to bind the joint venture or consortium. The composition or the constitution of the
joint venture shall not be altered without the prior written consent of the Employer.
1.3.9             Non-waiver
       (1)     Subject to GC Section 1.3.9(2), no relaxation, forbearance, delay or
indulgence by either Party in enforcing any of the terms and conditions of the Contract or the
granting of time by either Party to the other shall prejudice, affect or restrict the rights of that
Party under the Contract, nor shall any waiver by either Party of any breach of Contract
operate as waiver of any subsequent or continuing breach of Contract.
       (2)     To be a valid waiver, any waiver of a Party’s rights, powers or remedies under
the Contract shall,

                  (a)      be in writing;

                  (b)      be dated and signed by a duly authorized representative of the Party
                           granting such waiver;

                  (c)      specify the right, power or remedy being waived and the extent to
                           which it is being waived; and

                  (d)      where the waiver is given by the Employer, be approved by the body
                           legally authorized in accordance with the Applicable Law to waive the
                           Employer’s rights, powers or remedies under the Contract.
1.3.10            Severability
                If any provision or condition of the Contract is prohibited or rendered invalid
or unenforceable, such prohibition, invalidity or unenforceability shall not affect the validity
or enforceability of any other provisions and conditions of the Contract.
1.3.11            Number of Days
                 Except as expressly stated to the contrary elsewhere herein, in computing the
number of days for the purposes of the Contract all days shall be counted, including
Saturdays, Sundays and legal holidays, provided, however, that if the final day of any period
shall fall on a Saturday, Sunday, or legal holiday, then the final day shall be deemed to be the
next day which is not a Saturday, Sunday or legal holiday.
1.3.12            References to Currency
                Except where provided otherwise in the Contract, for the purpose of the
Contract, all references to currency or money shall mean the Local Currency.




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1.3.13              Rate of Interest
               Wherever a reference to the payment of interest is made in the Contract
Documents, the rate of interest shall be the borrowing rate set by the Central Bank of [ ]
which is applicable at the relevant time.
1.3.14              Survival of Obligations
               Upon the termination or expiration of the Contract pursuant to the Contract, all
rights and obligations of the Parties hereunder shall cease, except,
        (1)     such rights and obligations as may have accrued or to which the Parties may
be entitled on the date of termination or completion;
          (2)       the Operator’s obligation of confidentiality set forth in GC Section 3.4;
       (3)     the Operator’s obligation with respect to Contract Records, Accounting and
Auditing set forth in GC Section 3.7;
          (4)       any right which a Party may have under the Applicable Law;
        (5)     the Operator’s obligation to co-operate with the Employer on the matter of the
transition arrangements in the event of termination or on completion; and
        (6)    any duty of the Operator to make its Management Staff available for a period
of up to 60 days after the End Date to ensure a smooth transition to a Subsequent Operator.
1.3.15              Section References
       (1)     Section and subsection references in the Contract Documents which refer to
the General Conditions shall be preceded by the letters “GC” such that a reference to “GC
Section”, followed by a number, shall refer to that section or subsection number in the
General Conditions.
       (2)     Section and subsection references in the Contract Documents which refer to
the Form of Contract shall be preceded by the letters “FC” such that a reference to “FC
Section”, followed by a number, shall refer to that section or subsection number in the Form
of Contract.
       (3)     Section and subsection references in the Contract Documents which refer to
the Services Appendix shall be preceded by the letters “SA” such that a reference the “SA
Section”, followed by a number, shall refer to that section or subsection number in the
Services Appendix.
        (4)    Section and subsection references in the Contract Documents which refer to
the Performance Standards Appendix shall be preceded by the letters “PSA” such that a
reference to “PSA Section”, followed by a number, shall refer to that section or subsection
number in the Performance Standards Appendix.
1.4                 Notices
        (1)     Any notice, request or consent required or permitted to be given or made
pursuant to this Contract shall be in writing. Any such notice, request or consent shall be
considered to have been given or made when delivered in person to the Authorized
Representative of the Party to whom the communication is addressed, or when sent by
courier to such Party at the addresses for notice set out in the Contract Particulars Appendix.
        (2)    Notice will be considered to be effective in the case of both personal delivery
and delivery by courier, upon delivery to and acknowledgement of receipt in writing by the
receiving Party.



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        (3)    A Party may change its address for notice pursuant to this Contract by giving
the other Party notice of change in accordance with this GC Section 1.4.
       (4)     The Operator’s address for the purpose of giving notice pursuant to this GC
Section 1.4 shall be in [ ].
        (5)     Notice to the Operator pursuant to GC Section 1.4 shall be deemed to be
notice to all Parties, excluding the Employer.
1.5                 Law Governing Contract
                This Contract, its meaning and interpretation, and the relation between the
Parties shall be governed by the Applicable Law.
1.6                 Location
                The Operator shall perform the Services at such locations in the Service Area
as are specified in the Contract Documents and, where the location of a particular task is not
so specified, at such locations in the Service Area as the Employer may approve.
1.7                 Authority of Member in Charge
                If the Operator consists of a joint venture of more than one entity, the
Members hereby authorize the Member named in the Contract Particulars Appendix to act on
their behalf in exercising all the Operator’s rights and obligations toward the Employer under
this Contract, including, without limitation, the receiving of instructions and payments from
the Employer.
1.8                 Authorized Representatives
          (1)       Prior to the Starting Date, the Operator and the Employer shall each identify,

                    (a)      an individual to act as its contract liaison and coordinator (the
                             “Authorized Representatives”); and

                    (b)      an individual to be the official designate to act in the stead of its
                             Authorized Representative in the event that its Authorized
                             Representative in unavailable or unable to perform its obligations
                             under the Contract.
       (2)     The Authorized Representatives and their designates may take any action
required or permitted by the Contract and may execute any document required or permitted to
be executed under the Contract.
       (3)     The Operator shall not change its Authorized Representative or its designate
without the prior written consent of the Employer.
        (4)    For the purpose of the Contract, the Authorized Representatives and their
designates shall be those individuals named as Authorized Representatives in the Contract
Particulars Appendix.
1.9                 Taxes, Duties, Customs, Levies and Charges

1.9.1               Management Fixed Fee and Performance Incentive Compensation
       (1)     Except as provided in GC Section 1.9.1(2), the Operator shall be exempt from
the payment of all taxes and all duties, fees, customs, levies and charges assessed by all
municipal state or national authorities in [ ] (the “Taxes”) with respect to the Management




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      http://www.worldbank.org/ppp                                                                        September 2007
                                   Water Management Agreement - Example 4
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Staff costs and expenses, the Management Fixed Fee and the Performance Incentive
Compensation.
        (2)     The Operator and its Management Staff shall, in accordance with the
Applicable Law, pay all income and profit taxes assessed by all municipal, state or national
authorities in [ ] with respect to the Incentive Compensation and all salary and wages paid
to Management Staff .


1.9.2                 Procurement by the Operator
       (1)      If the Operator procures goods, works or services pursuant to GC Section
3.12.1(a) all Taxes related to that procurement shall be paid by the Employer.
       (2)      If the Operator procures goods, works or services pursuant to GC Section
3.12.1(b) all Taxes related to that procurement shall be paid by the Employer. The Parties
acknowledge that the amounts set out in the Operating Investment Fund Appendix do not
include any costs related to Taxes.


1.10                  Assignment
                2
        (1)       The Operator shall not assign to any third party the Contract, or any part
thereof, or any right, benefit, obligation, or interest therein, without the prior written consent
of the Employer[, except that the Operator shall be entitled to assign either absolutely or by
way of charge any monies due and payable to it or that become due and payable to it under
the Contract3].
       (2)    To be a valid assignment which has been approved by the Employer pursuant
to GC Section 1.10(1), the assignment must,

                      (a)        be in writing;

                      (b)        be dated and signed by a duly authorized representative of the
                                 Employer;

                      (c)        state the specific details of the assignment; and

                      (d)        be approved by the body legally authorized in accordance with the
                                 Applicable Law to exercise the necessary authority.



ARTICLE 2 - TERM COMMENCEMENT, COMPLETION, AND TERMINATION
OF CONTRACT
2.1                   Effectiveness of Contract
               The Contract shall come into force and effect on the date the Form of Contract
of this Contract is executed by the Parties (the “Effective Date”) contingent on final approval
by the IDA4.

2
 there is no statement as to whether the employer can assign the rights under the contract.
3
 this may not be appropriate in all circumstances.
4
 it may be that only certain provisions of the contract should come into force on the Effective Date and that others should come into force
once the condition precedent has been met.




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2.2                    Expiration of Contract
              Unless terminated earlier pursuant to GC Section 2.8 or extended pursuant to
GC Section 2.5, this Contract shall terminate on the fourth anniversary of the Starting Date
(the “End Date”).
2.3                    Commencement of Services
2.3.1                  Starting Date
        (1)     The Starting Date shall be established by the Employer5 and shall be a date no
later than 60 days after the Effective Date or on such later date as the Parties may agree in
writing (the “Starting Date”).
       (2)   Except as provided in GC Section 2.3.1(3), the Operator shall carry out all
Services commencing on the Starting Date.
        (3)    The Operator shall not take over the day to day operations and maintenance of
the water and wastewater systems in the Service Area, as set out in the Services Appendix,
until 30 days after the Starting Date (the “Takeover Date”).
2.4                    Services After the End Date
        (1)     The Operator, upon written request by the Employer no later than 30 days
prior to the End Date, shall provide assistance to the Employer during a transitional period of
up to 60 days after the End Date (the “Transition Assistance”). The purpose of the Transition
Assistance is to ensure a smooth transition between the Operator and a Subsequent Operator
of the Facilities. The Transition Assistance shall be related to only transition services and
shall not be the full range of services as set out in the Services Appendix.
      (2)     The Employer shall pay the Operator an amount equal to 1/48 of the
Management Fixed Fee for each month the Operator provides Transition Assistance as
payment for the Transition Assistance provided by the Operator.
        (3)     If the Employer makes a request for assistance pursuant to GC Section 2.4(1),
the Transition Assistance shall be provided by those Management Staff identified by the
Employer and the identified Management Staff shall be resident in [ ] until the completion
of the Transition Assistance. If the Employer does not identify all members of the
Management Staff to provide Transition Assistance, the payment identified in GC Section 2.4
shall be reduced in proportion to the number of Management Staff which are not providing
Transition Assistance.
2.5                    Extension of the Contract
      (1)      If both Parties agree, this Contract may be extended for a period of up to 12
months after the End Date. The Employer shall notify the Operator three months prior to the
End Date if it wishes to enter into negotiations regarding an extension to the Contract.
       (2)     The Parties acknowledge that there is no obligation on the part of the IDA to
provide any funding beyond the term of the Contract and the Parties shall not rely on further
funding by the IDA when discussing an extension to the Contract.




5
 the Employer is to determine the start date – however, there are a number of actions that need to take place prior to or on the start date,
such as making available facilities, ensuring staff have visas etc, and it may be appropriate to make these conditions precedent to the start
date




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2.6                    Force Majeure
2.6.1                  General
           (1)         For the purposes of this Contract, “Force Majeure” means an event with is,

                       (a)        beyond the reasonable control of a Party; and

                       (b)        makes a Party’s performance of its obligations6 under the Contract
                                  impossible or so impractical as reasonably to be considered impossible
                                  in the circumstances.
           (2)         Force Majeure includes, but is not limited to,

                       (a)        war, riots and civil disorder;

                       (b)        storm, flood, earthquake or other severely adverse weather conditions;

                       (c)        confiscation or other similar action by government agencies; and

                       (d)        strikes, lockouts and other industrial actions except where such strikes,
                                  lockouts and other industrial actions are within the power of the Party
                                  invoking Force Majeure to prevent,
                       if such events meet the test set out in GC Section 2.6.1(1)(b).
           (3)         Force Majeure shall not include,

                       (a)        any event which is caused by the negligence or intentional action of a
                                  Party or such Party’s Subcontractors or agents or employees; or

                       (b)        any event which a diligent Party could reasonably have been expected
                                  to,

                                  (i)         take into account at the time of the execution of this Contract;
                                              and

                                  (ii)        avoid or overcome in the carrying out of its obligations under
                                              the Contract.
      (4)     Force Majeure shall not include insufficiency of funds or failure to make any
payment required hereunder.
2.6.2                  No Breach of Contract
                 The failure of a Party to fulfill any of its obligations under the Contract shall
not be considered to be a breach of, or default under, this Contract to the extent that such
failure to fulfill the Contract obligation arose from an event of Force Majeure, provided that
the Party affected by such an event has taken all reasonable precautions, due care and
reasonable alternative measures, all with the objective of carrying out the terms and
conditions of this Contract.7


6
  in a case where a whole network is being managed, rather than a distinct asset, it is likely that in the event of Force Majeure the Operator
will be only partially prevented from performing the services – this should be made clear in the drafting
7
  for the avoidance of doubt, it should be made clear that if FM has an impact on the Operator to reach its composite score under the
Incentive Compensation, this should not penalize it




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2.6.3                  Measures to be Taken
      (1)      A Party affected by an event of Force Majeure shall take all reasonable
measures to fulfill its obligations under the Contract with a minimum of delay.
        (2)    A Party affected by an event of Force Majeure shall notify the other Party of
such event as soon as possible, and in any event not later than 14 days following the
occurrence of such event, providing evidence of the nature and cause of such event, and shall
similarly give notice of the restoration of normal conditions as soon as possible.
        (3)    The Parties shall take all reasonable measures to minimize the consequences
of any event of Force Majeure.
2.6.4                  Extension of Time
                Any period within which a Party shall, pursuant to this Contract, complete any
action or task, shall be extended for a period equal to the time during which such Party was
unable to perform such action as a result of Force Majeure.
2.6.5                  Payments
                During the period of the Operator’s inability to perform the Services as a
result of an event of Force Majeure, the Employer shall continue to pay the Operator under
the terms of this contract and shall reimburse the Operator for additional costs reasonably and
necessarily incurred by the Operator during such period for the purposes of the Services and
in reactivating the Services after the end of such period.
2.6.6                  Consultation
               Not later than 30 days after the Operator, as the result of an event of Force
Majeure, has become unable to perform a material portion of the Services, the Parties shall
consult with each other with a view to agreeing on appropriate measures to be taken in the
circumstances.
2.7                    Suspension8
               The Employer may, by written notice of suspension to the Operator, suspend
all payments to the Operator hereunder if the Operator fails to perform any of its obligations
under this Contract, including the carrying out of the Services, provided that such notice of
suspension,

                       (a)        shall specify the nature of the failure; and

                       (b)        shall require the Operator to remedy such failure within a period not
                                  exceeding 30 days after receipt by the Operator of such notice of
                                  suspension.
2.8                    Termination
2.8.1                  By the Employer
           (1)         The Employer may terminate this Contract if,

                       (a)        the Operator fails to remedy a failure in the performance of its
                                  obligations as specified in a notice of suspension pursuant to GC
8
  it unusual for an employer to be able to suspend all payments in the event that the Operator fails to perform its obligations as the Operator
will still have fixed costs that it needs to meet and so may also after a time become insolvent. This is also very harsh as the Employer may
suspend payment for any failure of the Operator, no matter how minor. If a provision of this sort is to be included it should be very
narrowly drafted and make it clear that payment shall resume as soon as the failure has been remedied.




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                                  Section 2.7 within 30 days of the Operator’s receipt of such notice of
                                  suspension or within such further period as the Employer may, in its
                                  sole discretion, approve in writing;

                      (b)         the Operator becomes insolvent or bankrupt or enters into any
                                  agreements with its creditors for relief of debt or takes advantage of
                                  any law for the benefit of debtors or goes into liquidation or
                                  receivership whether compulsory or voluntary;

                      (c)         the Operator fails to comply with any final decision reached as a result
                                  of arbitration proceedings pursuant to Article 8;

                      (d)         the Operator submits to the Employer a statement which has a material
                                  effect on the rights, obligations or interests of the Employer and which
                                  the Operator knows to be false;

                      (e)         as a result of Force Majeure, the Operator is unable to perform a
                                  material portion of the Services for a period of more than 60 days; or

                      (f)         the Employer, in its sole discretion and for any reason whatsoever,
                                  decides to terminate the Contract.
         (2)     Without limiting the generality of GC Section 2.8.1(1), if the Operator fails to
achieve a Composite Score of 1.5 in accordance with the Incentive Compensation Appendix
it shall constitute a performance failure for which the Employer may terminate the Contract
in accordance with GC Section 2.8.1.
2.8.2                 Required Notice of Termination – For Cause
         (1)      The Employer may terminate the Contract pursuant to GC Section 2.8.1(1)(a),
(b), (c), (d) or (e) by delivering a written notice of termination (the “Notice of Termination –
For Cause”) to the Operator and the termination of the Contract shall occur 30 days after the
date of the Notice of Termination – For Cause.
       (2)      The Notice of Termination – For Cause shall set out the specific section or
sections of the Contract pursuant to which the Contract is being terminated by the Employer.
2.8.3                 Required Notice of Termination – For Convenience9
                The Employer may terminate this Contract pursuant to GC Section 2.8.1(1)(f)
by delivering a written notice of termination (the “Notice of Termination – For
Convenience”) to the Operator and the termination of the Contract shall occur 60 days after
the date of the Notice of Termination – For Convenience.
2.8.4                 By the Operator
                      The Operator may terminate this Contract if,

                      (a)         the Employer fails to pay any money due to the Operator pursuant to
                                  this Contract within 45 days after receiving written notice from the
                                  Operator that such payment is overdue, if the payment is not subject to
                                  dispute pursuant to GC Article 8;

9
  an operator will resist a clause allowing the Employer to terminate for convenience as the operator will want certainty as to length of
contract. In any event, they will seek compensation for loss of profits in this circumstance – the operator will want to ensure that the
employer is discouraged from terminating for convenience




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                    (b)      the Employer is in material breach of its obligations pursuant to this
                             Contract and has not remedied the same within 45 days after receiving
                             written notice from the Operator;

                    (c)      as the result of Force Majeure, the Operator is unable to perform a
                             material portion of the Services for a period of more than 60 days; or

                    (d)      if the Employer fails to comply with any final decision reached as a
                             result of arbitration pursuant to GC Article 8.
2.8.5               Notice of Termination by the Operator
         (1)     If the Operator wishes to terminate this Contract pursuant to GC Section 2.8.4
it shall deliver a written notice of termination (the “Operator’s Notice of Termination”) to the
Employer and the termination of the Contract shall occur 30 days after the date of the
Operator’s Notice of Termination.
       (2)      The Operator’s Notice of Termination shall set out the specific section or
sections of the Contract pursuant to which the Contract is being terminated by the Operator.
2.8.6               Disputes about Events of Termination
                 If either Party disputes whether an event specified in GC Section 2.8.1(1)(a),
(b), (c), (d) and (e) or in GC Section 2.8.4 has occurred, such Party may, within 20 days after
receipt of notice of termination from the other Party, refer the matter to arbitration pursuant to
GC Article 8, and the Contract shall not be terminated on account of such event except in
accordance with the terms of any resulting arbitral award.
2.8.7               Cessation of Services
                 Upon termination of this Contract by notice of either Party to the other
pursuant to GC Section 2.8, the Operator shall, immediately upon dispatch or receipt of such
notice, take all necessary steps to bring the Services to a close in a prompt and orderly
manner and shall make every reasonable effort to keep expenditures for this purpose to a
minimum. With respect to Contract Records and equipment, materials and property which is
to be returned to the Employer, the Operator shall proceed as provided, respectively, by GC
Section 3.7 and 3.11.
2.8.8               Payment upon Termination
               Upon termination of this Contract pursuant to GC Section 2.8, the Employer
shall make the following payments to the Operator:

                    (a)      compensation pursuant to GC Article 6 for Services satisfactorily
                             performed prior to the date of termination; and

                    (b)      except in the case of termination pursuant to GC Section 2.8.1(1)(a),
                             (b), (c) or (d), reimbursement of any reasonable cost incident to the
                             prompt and orderly termination of the Contract.

ARTICLE 3 - OBLIGATIONS OF THE OPERATOR
3.1                 General
3.1.1               Services and Standard of Performance
                    The Operator shall,




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                      (a)         perform the Services set out in the Services Appendix;

                      (b)         perform the Services in accordance with the Performance Standards set
                                  out in the Performance Standards Appendix;

                      (c)         [carry out its obligations under the Contract with due diligence,
                                  efficiency and economy in accordance with,

                                  (i)        internationally accepted techniques and practices used in the
                                             water and wastewater industry; and

                                  (ii)       professional engineering, accounting and consulting standards
                                             recognized by international professional bodies;

                      (d)         observe sound management, technical and engineering practices;

                      (e)         employ appropriate advanced technology and safe and effective
                                  equipment, machinery and methods;

                      (f)         act, in fulfilling its obligations under the Contract, as faithful advisors
                                  to the Authorities10; and

                      (g)         support and safeguard the Employer’s legitimate interests in any
                                  dealings with Subcontractors or other Third Parties]11.
3.1.2                 Service Area
               The Operator shall perform the Services, as specified in the Services Appendix
and the Service Area Appendix.
3.1.3                 Facilities
                 The Operator shall perform the Services as they relate to the Facilities set out
in the Facilities Appendix.
3.2                   Law Governing Services
                The Operator shall perform the Services in accordance with the Applicable
Law and shall ensure that its Management Staff and Subcontractors perform the Services in
accordance with the Applicable Law. The Employer shall advise the Operator in writing of
relevant local customs and the Operator shall, after such notifications, respect such customs.
3.3                   Conflict of Interest
3.3.1                 Operator not to Benefit from Commissions, Discounts or Similar Payments
                The compensation of the Operator pursuant to GC Article 6 shall constitute the
Operator’s sole compensation in connection with this Contract or the Services and, subject to
GC Article 6, the Operator shall not accept for its own benefit any trade commission,
discount or similar payment in connection with activities pursuant to this Contract or to the
Services or in the discharge of its obligations hereunder, and the Operator, shall use its best

10
  this may be a difficult obligation for a court to interpret
11
   these standards are vague and may be difficult to enforce – it may be better to refer to good industry practice, with a definition such as
"Good Industry and Operating Practices" means the standards, practices, methods and procedures conforming to all applicable laws and
that degree of skill, diligence, prudence and foresight which would reasonably be expected from a skilled and experienced water services
utility company, contractor, engineer or operator, as the case may be, engaged in providing services similar to the Services or undertaking
capital works under the same or similar circumstances;




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      http://www.worldbank.org/ppp                                                                                               September 2007
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efforts to ensure that the Management Staff, any Subcontractors, as well as employees and
agents or either of them, similarly shall not receive any such additional remuneration.
3.3.2                   Operator and Affiliates Disqualification
                The Operator, its Subcontractors and any entity affiliated with the Operator or
the Subcontractors during the term of the Contract and after its termination shall be
disqualified from providing goods, works or services, other than the Services and any
continuation thereof, with respect to,

                        (a)         the goods, works and services purchased from the Operating
                                    Investment Fund;

                        (b)         any project resulting from or closely related to the Services; and

                        (c)         the Capital Investment Program.


3.3.3                   Prohibition of Conflicting Activities
                 The Operator, Management Staff, Subcontractors and the employees and
affiliates of the Operator and Subcontractors shall not engage, either directly or indirectly, in
any business or professional activities in [ ] which would conflict with the activities
assigned to them under this Contract.
3.4                     Confidentiality12
                The Operator, Subcontractors and the employees and affiliates of the Operator
and Subcontractors shall not, either during the term of the Contract or after the expiration of
the Contract, disclose any proprietary or confidential information relating to the Services, the
Contract or the Employer’s business or operations without the prior written consent of the
Employer. The determination of whether information is proprietary or confidential shall be
in the sole discretion of the Government of [ ].
3.5                     Liability of the Operator
       (1)     The Operator shall be liable to the Employer for the performance of the
Services in accordance with the provisions of this Contract and for any loss suffered by the
Employer, the Authorities or Third Parties as a result of a default of the Operator in such
performance, subject to the following limitations:

                        (a)         the Operator shall not be liable for any damage or injury caused by or
                                    arising out of the act, neglect, default or omission of any persons other
                                    than,

                                    (i)        the Operator;

                                    (ii)       the Management Staff;

                                    (iii)      the Subcontractors;

                                    (iv)       the Operations Staff who are under the supervision of the
                                               Operator pursuant to the Contract; and

12
     this clause is only in favor of the Employer – confidentiality provisions are usually mutual/ or vaguely mutual




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       http://www.worldbank.org/ppp                                                                                                   September 2007
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                                    (v)        the employees of the Operator and the Subcontractors; and

                        (b)         the Operator shall not be liable for any loss or damage caused by or
                                    arising out of circumstances over which the Operator had no control.
             (2)        Except in cases of criminal negligence or wilful misconduct,

                        (a)         the Operator shall not be liable to the Employer in contract, tort, or
                                    otherwise, for any indirect or consequential loss or damage, loss of use,
                                    loss of production, or loss of profits of interest costs, provided that this
                                    exclusion shall not apply to any obligation of the Operator to pay
                                    liquidated damages13 to the Employer; and

                        (b)         the aggregate liability of the Operator to the Employer, whether under
                                    the Contract, in tort or otherwise, shall not exceed the total
                                    Management Fixed Fee, provided that this limitation shall not apply to
                                    the cost of repairing or replacing defective equipment, or to any
                                    obligation of the Operator indemnify the Employer with respect to
                                    patent infringement.
3.6                     Insurance to be Taken Out by the Operator14
             (1)        The Operator shall, during the performance of the Contract,

                        (a)         take out and maintain at the Operator’s own cost; and

                        (b)         cause the Subcontractors to take out and maintain at the
                                    Subcontractor’s own cost,
                        insurance against the risks and for the coverages as follows:

                                    (i)        Third Party motor vehicle liability insurance in respect of
                                               motor vehicles operated in connection with the carrying out of
                                               the Services under the Contract by the Operator or its
                                               Management Staff or any Subcontractors or their employees,
                                               with a minimum coverage of [US $1,000,000];

                                    (ii)       Third Party liability insurance, with a minimum coverage of US
                                               [$1,000,000];

                                    (iii)      professional liability insurance, with a minimum coverage of
                                               US [$1,000,000];

                                    (iv)       employer’s liability and worker’s compensation insurance in
                                               respect of the Management Staff of the Operator and
                                               employees of any Subcontractor, in accordance with the
                                               relevant provisions of the Applicable Law, as well as, with
                                               respect to the Management Staff and Subcontractors, any such
                                               life, health, accident, travel or other insurance as may be
                                               appropriate; and

13
  there is no other reference in the contract to liquidated damages in the contract – it is not clear whether this is
intended or not
14
     advice should always be obtained as to the appropriate levels of insurance and what is available locally




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       http://www.worldbank.org/ppp                                                                                            September 2007
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                             (v)       insurance against loss of or damage to,

                                       (A)      equipment purchased in whole or in part with funds
                                                provided under this Contract;

                                       (B)      the Operator’s property used in the performance of the
                                                Services; and

                                       (C)      any documents prepared by the Operator in the
                                                performance of the Services.
        (2)    The insurance referred to in GC Section 3.6(1)(b)(i), (ii), (iii), (iv) and (v)
shall be on terms and conditions approved by the Employer.
        (3)     The Operator shall, at the Employer’s request, provide written evidence,
satisfactory to the Employer that the insurance set out in GC Section 3.6(1) has been taken
out and maintained and that all current premiums for that insurance have been paid.
3.7                 Contract Records, Accounting and Auditing
3.7.1               Contract Records
        (1)    All data, information, documentation and account of any kind whatsoever (the
“Contract Records”) prepared by the Operator in performing the Services shall become and
remain the property of the Employer and the Operator shall deliver all Contract Records and
a detailed inventory of those Contract Records to the Employer no later than the date of
termination or expiration of the Contract.
          (2)       The Contract Records shall include but not be limited to,

                    (a)      information of any kind whatsoever related to the Operating
                             Investment Fund;

                    (b)      all files, documents, plans, drawings, specifications, notes, minutes of
                             meetings and conversations; and

                    (c)      all manuals, reports, condition surveys, safety records, audit records,
                             inventories, laboratory test results, procurement records, customer
                             information, financial information, financial statements, invoices,
                             accounting records, subcontracts and personnel records,

whether stored in hard copy or electronically.
        (3)   The Operator shall provide the Employer with unrestricted access to the
Contract Records during the term of the Contract, including the right to make and retain
copies.
        (4)    The Operator may retain a copy of the Contract Records but shall not use them
for purposes unrelated to this contract without the prior written approval of the Employer.
3.7.2               Accounting
               The Operator shall keep accurate and systematic accounts in respect of the
Services and the Contract in accordance with internationally accepted accounting principles.




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3.7.3               Auditing Contract Records
        (1)     The Employer may, in its sole discretion, audit the Operator’s accounts,
financial information, financial statements and technical information in respect of any matters
related to the Contract at any reasonable time and without notice to the Operator.
       (2)    The Employer may complete the audit or audits itself or may retain an
independent auditor, at the Employer’s expense, to complete the audit or audits.
        (3)    The IDA may, in its sole discretion, inspect or audit the Operator’s accounts,
financial information, financial statements, and technical information in respect of any
matters related to the Contract at any reasonable time and without notice to the Operator and
may have the audit carried out by auditors appointed by the IDA.
3.8                 Subcontractors
        (1)     The Operator shall not enter into any contract or contracts which will result in
the total or majority of the Services being performed by a Subcontractor. The Operator may
enter into a contract or contracts with Subcontractors to perform some elements of the
Services.
       (2)      The Operator may not enter into a contract with any Subcontractor without the
prior written consent of the Employer.
       (3)    If a Subcontractor is listed in the Annual Operating Investment Fund Plan and
the Annual Operating Investment Fund Plan is approved by the Employer, that approval by
the Employer shall constitute the Employer’s consent pursuant to GC Section 3.8(2).
       (4)      The Operator shall ensure that any of its Contract obligations which are
relevant to the work being carried out by a Subcontractor are incorporated into the terms and
conditions of the agreement under which the Subcontractor is retained.
        (5)    Subcontracting by the Operator does not relieve the Operator of any of its
obligations under the Contract.
         (6)    The Employer’s consent to a Subcontractor imposes no obligations or
liabilities whatsoever on the Employer and in no way relieves the Operator of any of its
obligations under the Contract.
3.9                 Meetings
        (1)    The Operator’s Authorized Representative and the Employer’s Authorized
Representative shall meet not less than once weekly to discuss and review the Services and
Facilities. These weekly meetings shall be scheduled as agreed upon from time to time by
the Authorized Representatives.
        (2)     The Operator’s Authorized Representatives shall meet with the Employer’s
Authorized Representative at regularly scheduled monthly meetings to discuss and review
any issues related to the Services and Facilities and the bi-monthly reports prepared by the
Operator pursuant to the Services Appendix and other Contract Documents.
3.10                Reporting Obligations
                 Unless otherwise specified in the Contract, the Operator shall submit to the
Employer ten copies in English and [ ] and an executive summary in [ ] of the reports and
documents required by the Contract, in the form, in the numbers and within the time periods
set forth in the Contract. The Employer may, in its discretion, request an additional 10 copies
of a report without cost to the Employer.




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3.11             Equipment and Materials Furnished by the Employer
       (1)     The assets of the water and wastewater systems in the Service Area will
remain under the ownership and control of the Authorities currently charged with the
operations and maintenance of the systems in accordance with the Applicable Law.
       (2)    Equipment and materials and any other property whatsoever made available to
the Operator by the Employer, or purchased by the Operator with funds provided by the
Employer, including the Management Fixed Fee funds, shall be the property of the Employer
and shall be marked accordingly.
        (3)    Upon termination or expiration of this Contract, the Operator shall provide to
the Employer an inventory of such equipment and materials and other property and shall
dispose of such equipment and materials and property in accordance with the Employer’s
instructions.
3.12             Procurement Plans and Practices
3.12.1           General
              The Operator shall carry out two types of purchasing on behalf of the
Employer as follows:

                 (a)      the Operator shall procure goods, works, and services for day to day
                          operations and maintenance in accordance with SA Article 3; and

                 (b)      the Operator shall procure goods, works, and services with respect to
                          the programs under the Operating Investment Fund.
3.12.2           Day to Day Operations Procurement
               The Operator shall procure goods and services for use in the day to day
operations and maintenance in [ ] in accordance with the Procurement Guidelines
developed by the Operator as required by SA Section 2.3(2) using funds raised from
Employer revenues.
3.12.3           Operating Investment Fund – Procurement
               In the case of goods, works and services that are paid for out of the Operating
Investment Fund, and have been approved pursuant to GC Section 3.12.4, the Operator shall
adopt and follow the procurement policies of the IDA as set out in the Procurement
Appendix.
3.12.4           The Annual Operating Investment Fund Plan
         (1)     The Operator shall prepare and submit to the Employer,

                 (a)      60 days after the Starting Date; and

                 (b)      60 days prior to the last day of each of the first, second and third
                          Contract Years for the next Contract Year,

a detailed and comprehensive plan and budget for the use of the funds identified in the
Operating Investment Fund Appendix (the “Annual Operating Investment Fund Plan”).
         (2)     The Operator shall develop the Annual Operating Investment Fund Plan,




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                       (a)        for those projects specifically identified as eligible projects in the
                                  Operating Investment Fund Appendix and in accordance with the
                                  budget set out in the Operating Investment Fund Appendix;

                       (b)        for projects of a similar nature and similar budget to those set out in the
                                  Operating Investment Fund Appendix for which the Operator has
                                  received the Employer’s prior written consent to include in the Annual
                                  Operating Investment Fund Plan.
      (3)    The Operator shall also provide a comprehensive spending plan as part of the
Annual Operating Investment Fund Plan.
       (4)    The Employer shall, which 30 days of receiving the Annual Operating
Investment Fund Plan, either approve, or approve with revisions, the Annual Operating
Investment Plan as submitted by the Operator. If the Employer does not approve the Annual
Operating Investment Fund Plan, or approve with revisions, within 30 days of receiving it,
the Annual Operating Investment Fund shall be deemed to be approved.
        (5)     After the Annual Operating Investment Fund Plan has been approved pursuant
to GC Section 3.12.4(4), those expenditures identified in the approved Annual Operating
Investment Plan shall be expenditures which are eligible to be paid from the Operating
Investment Fund for the Contract Year to which the Annual Operating Investment Fund Plan
applies (the “Investment Fund Eligible Expenditures”).
       (6)    The Employer shall pay the Investment Fund Eligible Expenditures in
accordance with the Procurement Appendix. 15
3.13                   Collection and Handling of Revenues
      (1)     The Operator shall, in accordance with the Services Appendix, collect
Revenues on the Employer’s behalf.
       (2)    The Employer shall open and maintain a deposit account at a bank which has
branches in Yerevan to be used solely for the deposits of all Revenues collected by the
Operator on behalf of the Employer. The account shall be in the Employer’s name (the
“Revenue Account”) and the choice of the bank shall be in the Employer’s sole discretion.
        (3)     The Operator shall directly deposit all of the collected Revenues into the
Revenue Account which shall be a dedicated account for Revenues collected by the Operator.
The Operator acknowledges that at all times ownership of the collected Revenues rests with
the Employer. The Operator shall deposit all collected Revenues, whether in the form of
cash, cheques or other form, to the Revenue Account on the day of receipt. If it is not
possible for the Operator to deposit Revenues on the day of receipt, the Revenues shall be
deposited by the Operator on the next banking day.
       (4)    At all times, all Revenues collected by the Operator are the property of the
Employer. Until such time as the Operator deposits the Revenues into the Revenue Account,
the Revenues shall be in the care and custody of the Operator.
       (5)     The Operator shall not deposit nor permit the deposit of the Revenues into any
account other than the Revenue Account.
       (6)    The Operator shall be liable for any loss, theft or destruction of the Revenues
which occurs prior to the deposit of the Revenues into the Revenue Account. In the event of

15
   It is unclear whether the Operator will be relieved of its performance obligations in the event that the Employer fails to pay the
Investment Fund Eligible Expenditures/ approve the Annual Operating Investment Fund




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any loss or theft of Revenues before they are deposited to the Revenue Account, the Operator
shall pay the amount of such losses to the Employer forthwith and without recourse to any
defense or objection.
        (7)   The Operator shall put in place, prior to the receipt of any of the Revenues
security measures necessary to protect such Revenues from loss, theft or destruction.
       (8)      Failure to comply with any of the above will constitute a default of the
Operator entitling Employer to suspend payments and terminate this Contract in accordance
with Articles 2.7 and 2.8 and any other appendices under this Contract.
3.14                Performance Security
                The Operator shall take out and maintain at its own expense a performance
security from a reputable bank guaranteeing the compliance of the Operator with the terms
and conditions of the Contract. The form and wording of the Performance Security shall be
as provided for in the Performance Security Appendix. The Operator shall provide the
performance security no later than 30 days after the Operator’s receipt of the Notification of
Award pursuant to the Request for Proposals. The security shall be valid for an initial period
of 12 months beginning on the Effective Date. The security shall ensure that security
automatically renews annually, each renewal to take effect immediately on expiry of the
previous security. The fourth annual performance security shall be supplied to expire no
earlier than 18 months after the End Date or 18 months after the date of termination,
whichever is earlier. The amount of the performance security shall be $1,000,000 U.S. per
Contract Year.

ARTICLE 4 - OPERATOR’S MANAGEMENT STAFF, OPERATIONS STAFFING
AND OPERATIONS AND MAINTENANCE COSTS
4.1                 General – Management Staff
       (1)     The Operator shall ensure that all Management Staff are qualified,
appropriately certified, competent and capable of performing the Services and that the
Management Staff is capable of providing the expertise required by the Management Staff
Appendix.
      (2)   The Operator shall provide the expertise and the Management Staff listed in
the Management Staff Appendix in accordance with the provisions of the Management Staff
Appendix.
4.2                 Removal or Replacement of Management Staff
      (1)   The Operator shall not change the Management Staff set out in the
Management Staff Appendix without the prior written consent of the Employer.
        (2)  The Operator shall not change any levels of responsibility, time periods that
any member of the Management Staff is committed to the Contract or any other matter set out
in the Management Staff Appendix without the prior written consent of the Employer.
       (3)     If, for any reason beyond the Operator’s control, it becomes necessary to
replace any of the Management Staff, the Operator shall forthwith provide a person of
equivalent or better qualifications to the satisfaction of the Employer.
          (4)       If,




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                    (a)      in the Employer’s discretion, it determines that any member of the
                             Management Staff has committed serious misconduct or has been
                             charged with having committed a criminal action; or

                    (b)      the Employer has reasonable cause to be dissatisfied with the
                             performance of any of the Management Staff,


then the Operator shall, at the Employer’s written request, remove the identified person
forthwith and replace him or her with another person of equivalent or better qualifications, to
the satisfaction of the Employer.
       (5)    If, pursuant to GC Section 4.2(3) or 4.2(4), the Operator provides a
replacement person to the Management Staff, it shall be at no additional cost to the
Employer.
4.3                 Operator’s Resident Project Manager
               The Operator shall ensure that, at all times during the term of the Contract, the
project manager, or the project manager’s designate, is in residence in [        ] and is in
charge of the performance of the Services.
4.4                 Operations Staffing16
               The Operator shall direct the activities of the staff employed by the Employer
in carrying out water and wastewater services in the Service Area (the “Operations Staff”) in
accordance with the Staffing Policy Appendix.
4.5                 Operations and Maintenance Budgets
        (1)    While the Operator is responsible for day to day operations and maintenance,
the costs and expenses for day to day operations and maintenance, excluding the
Management Staff Costs, shall be paid by the Employer.
        (2)    Notwithstanding GC Section 4.5(1), the Operator shall play the lead role in in
the preparation of the annual operations and maintenance budgets for the Facilities and
Services. The Operator shall submit these proposed annual budgets to the Employer, on a
schedule to be determined by the Employer, for review and approval.


ARTICLE 5 - OBLIGATIONS OF THE EMPLOYER
5.1                 Assistance and Exemptions
                    The Employer shall use its best efforts to,
       (1)    provide the Operator, Subcontractors and Management Staff with work
permits and such other documents as shall be necessary to enable the Operator,
Subcontractors or Management Staff to perform the Services;




16
  it is not clear how the Operator will be able to direct the activities of the Employer’s staff if the Employer
continues to determine pay scales and enforce discipline – this is a difficult area as the operator will be
dependent in part on the staff to ensure performance and service levels. At the least the Employer should be
obliged to discipline staff that are brought to its formal attention by the Operator.



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        (2)    arrange for the Management Staff and, if appropriate, their eligible dependants
to be provided promptly with all necessary entry and exit visas, residence permits, exchange
permits and any other documents required for their stay in [ ];
       (3)     facilitate prompt clearance through customs of any property required for the
Services and of the personal effects of the Management Staff and their eligible dependants;
and
        (4)     issue to officials, agents and representatives of the Employer all such
instructions as may be necessary or appropriate for the prompt and effective implementation
of the Services.
5.2                 Access to Land
                The Authorities shall provide the Operator, free of charge, with unimpeded
access to all land in the Service Area in respect of which access is required for the
performance of the Services and in respect of which the Authorities have control. The
Employer will be responsible for any damage to such land or any property thereon resulting
form such access and will indemnify the Operator and each of the Management Staff in
respect of liability for any such damage, unless such damage is caused by the default or
negligence of the Operator, the Management Staff or any Subcontractor or the
Subcontractor’s employees.
5.3                 Facilities, Municipal Development Project Management Unit, Operations
                    Staff, and Equipment and Materials
       (1)          The Employer shall, free of charge, for the purpose of carrying out the
Services,

                    (a)      make the Operations Staff available to the Operator in accordance with
                             the Staffing Policy Appendix;

                    (b)      provide all equipment and materials used by the Employer in the
                             provision of the Services in the Base Year to the Operator;

                    (c)      make the Facilities available to the Operator in accordance with the
                             Contract; and

                    (d)      ensure that the Municipal Development Project Management Unit set
                             out in the GC Section 5.5 is operational at all times during the term of
                             the Contract.
       (2)     If the Employer fails to carry out its obligations in accordance with GC
Section 5.3 then the Parties shall agree on,

                    (a)      any time extension that it may be appropriate for the Employer to grant
                             to the Operator for the performance of the Services;

                    (b)      the manner in which the Operator shall procure the equipment and
                             materials or assistance required by this GC Section 5.3 from other
                             sources; and

                    (c)      whether the Employer will permit the procurement agreed to pursuant
                             to GC Section 5.3(2)(b) to be made from the Operating Investment
                             Fund.



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                              Water Management Agreement - Example 4
                                                                                                    Page 24 of 30

5.4                 Payment
              In consideration of the Service performed by the Operator under this Contract,
the Employer shall make to the Operator such payments and in such manner as is provided by
GC Article 6 of this Contract.
5.5                 Municipal Development Project Management Unit
        (1)     The Municipal Development Project Management Unit (the “MDPMU”) shall
be responsible for all coordination and supervision with respect to all aspects of the activities
related to this Contract.
       (2)     The MDPMU shall, on behalf of the Employer, carry out all project
coordination and supervision responsibilities under this Contract including, but not limited to,

                    (a)      direct supervision of the Operator;

                    (b)      providing the Authorized Representative for the Employer;

                    (c)      attending all meetings with the Operator on behalf of the Employer;
                             and

                    (d)      approving and reviewing all submissions made by the Operator to the
                             Employer in accordance with this Contract.
5.6                 Reviews and Approvals of Submissions
        (1)     Except as otherwise provided in the Contract, if the Operator submits a plan,
report or other similar documentation for review and approval by the Employer, the
Employer shall review and either approve or provide written comment on the Operator’s
submission within 30 days after the day of submission by the Operator.
       (2)       If the Employer fails to approve or refuses to approve the Operator’s
submission in accordance with GC Section 5.6(1), the Operator shall notify the Employer in
writing that it has not received a response to its submission.
        (3)     If the Employer fails to respond to the Operator’s written notification pursuant
to GC Section 5.6(2) within 14 days after the receipt by the Employer of the Operator’s
written notification, the Operator’s submission shall be deemed to be approved.


ARTICLE 6 - COMPENSATION TO BE PAID TO THE OPERATOR
6.1                 Management Staff Costs
                The Operator shall, at its own expense, pay all costs and expenses of, or
related to, the Management Staff including, but not limited to,

                    (a)      wages, salaries, benefits, allowances, and severances;

                    (b)      the Operator’s home office support and all utility costs related to office
                             premises in [     ] for the Operator which office premises are to be
                             provide by the Employer;

                    (c)      all vehicle, accommodation and transportation costs, whether local or
                             international;



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                              Water Management Agreement - Example 4
                                                                                                    Page 25 of 30

                    (d)      travel and relocation of Management Staff and their dependants;

                    (e)      communications, photocopying, telephone, faxes, hardware, software
                             and office supplies; and

                    (f)      training and development of the Management Staff.
6.2                 Compensation to be Paid to the Operator
6.2.1               Compensation to be Paid
                    The Employer shall pay the Operator,

                    (a)      a fixed fee for the services of the Management Staff (the “Management
                             Fixed Fee”) in accordance with the Bidder’s Price Form; and

                    (b)      an annual performance incentive payment (the “Performance Incentive
                             Compensation”) in accordance with the Incentive Compensation
                             Appendix.
6.2.2               Management Fixed Fee
        (1)    The Employer shall pay the Operator the Management Fixed Fee for the
Services provided by the Management Staff of the Operator. The Operator acknowledges
that the Management Fixed Fee is intended to fully compensate the Operator for the Services
of the Management Staff.
       (2)    The Operator shall make no claim whatsoever for additional costs, expenses or
reimbursement for any costs or expenses associated with the Management Staff and
acknowledges that the Management Fixed Fee constitutes the only amount payable by the
Employer to the Operator for the Management Staff.
6.2.3               Performance Incentive Compensation
       (1)    The Operator acknowledges that the intent of the Performance Incentive
Compensation is to compensate the Operator based on the extent to which it achieves the
system performance improvements set out in the Incentive Compensation Appendix.
        (2)     The Performance Incentive Compensation for each Contract Year shall be
calculated in accordance with the Incentive Compensation Appendix.
6.3                 Payment
6.3.1               Payment of Management Fixed Fee
        (1)   On the Starting Date, the Employer shall pay to the Operator an advance
payment equal to 20 per cent of the Management Fixed Fee and the Employer shall make the
payment in the currency or currencies as specified in the Bidder’s Price Form (the
“Management Fixed Fee Advanced Payment”). The Management Fixed Fee Advance
Payment will be set off by the Employer in equal installments against the monthly
Management Fixed Fee payments to the Operator for 48 months of the Contract term until the
Management Fixed Fee Advance Payment has been fully set off (the “Advanced Payment
Set-off”).
        (2)    The Management Fixed Fee Advance Payment will be due from the Employer
after the Operator has provided the Employer with a bank guarantee, in the form set out in the
Bank Guarantee Appendix, in an amount of and in the currency or currencies of the
Management Fixed Fee Advanced Payment. Such bank guarantee may be reduced annually



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      http://www.worldbank.org/ppp                                                                        September 2007
                              Water Management Agreement - Example 4
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by the amount which has been set off, as provided in GC Section 6.3.1(1), in the previous
Contract Year.
       (3)    Within 45 days after the Starting Date and by the 15th day of each subsequent
month, the Operator shall render an invoice to the Employer for the services provided by the
Management Staff in the preceeding month. The invoice shall be in the amount of the
monthly Management Fixed Fee minus the Advanced Payment Set-off.
        (4)      The monthly Management Fixed Fee shall equal the Management Fixed Fee
as set out in the Bidder’s Price Form divided by 48.
        (5)    The Employer shall pay each invoice, in the currency or currencies specified
in the Bidder’s Price Form, within 60 days after the date of the invoice, except to the extent
the Employer is permitted and decides to withhold a portion of the Management Fixed Fee
pursuant to the Contract.
        (6)     The Operator shall ensure that it retains all information which clearly indicates
the actual costs to the Operator of the Management Staff. All information with respect to
these costs shall be made available to the Employer at the Employer’s request.
6.3.2               Payment of the Performance Incentive Compensation
       (1)     Within 3 months of the Effective Date, the Employer shall retain and pay for
an independent auditor from a reputable international firm (the “Independent Auditor”) to
undertake an audit of the Operator’s achievements, calculate the Incentive Compensation for
the applicable Contract Year and to resolve all disputes with respect to the calculation of the
Performance Incentive Compensation. Notwithstanding GC Article 8, the decisions of the
Independent Auditor, with respect to the calculation of the Performance Incentive
Calculation, shall be final and shall not be subject to the settlement of disputes process.
        (2)   Within 30 days after the end of each Contract Year, the Operator shall submit
to the Employer its calculations of the Performance Incentive Compensation for the previous
Contract Year. The Operator shall prepare the calculation in accordance with the Incentive
Compensation Appendix.
       (3)     Within 45 days after the Operator’s submission to the Employer pursuant to
the GC Section 6.3.2(2), the Employer shall inform the Operator as to whether it agrees or
disagrees with the Operator’s calculation based upon the recommendation and comfort letter
from the Independent Auditor.
        (4)     If the Employer disagrees with the Operator’s calculations, or does not
respond within the time limit set out in GC Section 6.3.2(3), either Party may refer the matter
again to the Independent Auditor for resolution.
          (5)       The Independent Auditor shall,

                    (a)      complete a comprehensive review of the calculations; and

                    (b)      meet with Parties, separately and together,
                    before reaching a final decision.
6.4                 Currency and Exchange Rates
      (1)    The Employer shall pay the Operator the Management Fixed Fee in the
amounts and currency or currencies set out in the Bidder’s Price Form.




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      http://www.worldbank.org/ppp                                                                        September 2007
                                     Water Management Agreement - Example 4
                                                                                                                                    Page 27 of 30

     (2)     The Employer shall pay the Operator the Performance Incentive
Compensation in accordance with the Incentive Compensation Appendix.
6.5                    Change in Contract Elements17
        (1)     Except as provided in GC Section 6.5(2) and in the Incentive Compensation
Appendix, the Operator shall make no claim whatsoever for any adjustment to the
Management Fixed Fee or the Performance Incentive Compensation. Without limiting the
generality of the foregoing, the Operator shall make no claim whatsoever for any adjustment
as a result of,

                       (a)         a change in the number or type of water and wastewater customers in
                                   the Service Area;

                       (b)         changes to the Facilities or the addition of new Facilities;

                       (c)         changes to the quality or quantity of the raw water supply or the
                                   wastewater; or

                       (d)         disruption to the water or wastewater system as a result of the
                                   Authorities’ capital programs.
        (2)      If, after the Effective Date, there is a change in the Applicable Law which
either the Operator or the Employer can demonstrate has mateirally increased or decreased
the cost of performing the Services then either Party18, as applicable, shall be entitled to an
adjustment of either the Management Fixed Fee or the Performance Incentive Compensation
to fully take into account the financial impact of the change in the Applicable Law by
addition to or deduction from the Management Fixed Fee or the Performance Incentive
Compensation, as the case may be.


ARTICLE 7 - FAIRNESS AND GOOD FAITH19
7.1                    Good Faith
                The Parties undertake to act in good faith with respect to each other’s rights
under the Contract and to adopt all reasonable measures to ensure the realization of the
objectives of this Contract.
7.2                    Operation of the Contract
                  The Parties recognize that it is impractical in this Contract to provide for every
contingency which may arise during the life of the Contract, and the Parties hereby agree that
it is their intention that this Contract shall operate fairly as between them, and without
detriment to the interest of either of them, and that, if during the term of this Contract either
Party believes that this Contract is operating unfairly, the Parties will use their best efforts to
agree on such action as may be necessary to remove the cause or causes of such unfairness,


17
    there is no provision for the operator being compensated or the performance standards being amended in the event that the base data on
which the operator has prepared its bid is inaccurate. This is often a concern for operators coming in as they may find themselves required
to meet performance standards that cannot be achieved by the assets, for instance if treatment or network capacity is not as expected
18
   it may be appropriate to indicate a monetary threshold for materiality
19
   it is not clear why this clause has been included – in a civil law jurisdiction there is likely to be a similar concept incorporate into law – is
this supposed to supplement/ reflect/ supersede it? In a common law jurisdiction there is no such understood concept – other than doctrines
preventing a party from benefiting from fraud/ negligent misrepresentation – a court in a common law jurisdiction/ arbitral panel may have
difficulties in interpreting such a provision




      PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)                                Victoria Rigby Delmon, LEGPS
      http://www.worldbank.org/ppp                                                                                                     September 2007
                                    Water Management Agreement - Example 4
                                                                                                                                 Page 28 of 30

but no failure to agree on any action pursuant to this GC Section 7.2 shall give rise to a
dispute subject to arbitration in accordance with GC Article 8 hereof.


ARTICLE 8 - SETTLEMENT OF DISPUTES
8.1                    Amicable Settlement
                The Parties shall use their best efforts to settle amicably all disputes arising
out of or in connection with this Contract or the interpretation thereof.20
8.2                    Right to Arbitration
               Any dispute between the Parties as to matters arising pursuant to this Contract
which cannot be settled amicably within 30 days after receipt by one Party of the other
Party’s request for such amicable settlement may be submitted by either Party in arbitration
in accordance with the provisions of GC Sections 8.3, 8.4, 8.5, 8.6 and 8.7.
8.3                    Selection of Arbitrators21
                Each dispute submitted by a Party to arbitration shall be heard by a sole
arbitrator or an arbitration panel composed of three arbitrators, in accordance with the
following provisions:

                       (a)        where the Parties agree that the dispute concerns a technical matter,
                                  they may agree to appoint a sole arbitrator or, failing agreement on the
                                  identity of such sole arbitrator within 30 days after receipt by the other
                                  Party of the proposal of a name for such an appointment by the Party
                                  who initiated the proceedings, either Party may apply to the
                                  International Chamber of Commerce (“ICC”) for a list of not fewer
                                  than five nominees and, on receipt of such list, the Parties shall
                                  alternately strike names therefrom, and the last remaining nominee on
                                  the list shall be the sole arbitrator for the matter in dispute. If the last
                                  remaining nominee has not been determined in this manner within 60
                                  days of the date of the list, the ICC shall appoint, upon the request of
                                  either Party and from such list or otherwise, a sole arbitrator for the
                                  matter in dispute;

                       (b)        where the Parties do not agree that the dispute concerns a technical
                                  matter, the Employer and the Operator shall each appoint one
                                  arbitrator, and these two arbitrators shall jointly appoint a third
                                  arbitrator, who shall chair the arbitration panel. If the arbitrators
                                  named by the Parties do not succeed in appointing a third arbitrator
                                  within 30 days after the latter of the two arbitrators named by the
                                  Parties has been appointed, the third arbitrator shall, at the request of
                                  either Party, be appointed by the ICC; and

                       (c)        if, in a dispute subject to GC Section 8.3(b), one Party fails to appoint
                                  its arbitrator within 30 days after the other Party has appointed its
                                  arbitrator, the Party which has named an arbitrator may apply to the

20
   the parties may wish to consider going to an independent expert, at least in relation to disputes over technical matters, before resorting to
arbitration
21
   parties may wish to consider having a panel of three arbitrators, one chosen by each of the parties and the third chosen by the parties
jointly, or failing agreement, by the ICC or other similar organization




      PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)                             Victoria Rigby Delmon, LEGPS
      http://www.worldbank.org/ppp                                                                                                  September 2007
                              Water Management Agreement - Example 4
                                                                                                    Page 29 of 30

                             ICC to appoint a sole arbitrator for the matter in dispute, and the
                             arbitrator appointed pursuant to such application shall be the sole
                             arbitrator for that dispute.
8.4                 Rules of Procedure
               Except as stated herein, arbitration proceedings shall be conducted in
accordance with the rules of procedure for arbitration of the United Nations Commission on
International Trade Law (UNCITRAL) as in force on the Effective Date of this Contract.
8.5                 Substitute Arbitrators
               If for any reason an arbitrator is unable to perform its function, a substitute
shall be appointed in the same manner as the original arbitrator.
8.6                 Nationality and Qualifications of Arbitrators
                 The sole arbitrator or the third arbitrator appointed pursuant to GC Section 8.3
(a), (b) and (c) shall be an internationally recognized legal or technical expert with extensive
experience in relation to the matter in dispute and shall not be a national of the Operator’s
home country or of [ ]. For the purposes of this GC Section 8.6, “home country” means,

                    (a)      the country of incorporation of the Operator;

                    (b)      the country in which the Operator’s or any of their Member’s principal
                             place of business is located;

                    (c)      the country of nationality of a majority of the Operator’s shareholders;
                             and

                    (d)      the country of nationality of the Subcontractor concerned, where the
                             dispute involves a subcontract.
8.7                 Miscellaneous
                    In any arbitration proceeding under the Contract,

                    (a)      proceedings shall, unless otherwise agreed by the Parties, be held in
                             Yerevan, [ ];

                    (b)      the English language shall be the official language of all purposes; and

                    (c)      the decision of the sole arbitrator or of a majority of the arbitrators or
                             of the third arbitrator if there is no such majority shall be final and
                             binding and shall be enforceable in any court of competent jurisdiction,
                             and the Parties hereby waive any objections to or claims of immunity
                             in respect of such enforcement.




      PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)   Victoria Rigby Delmon, LEGPS
      http://www.worldbank.org/ppp                                                                        September 2007
                              This document has been prepared for the purposes of the
 PPP IN INFRASTRUCTURE RESOURCE CENTER FOR CONTRACTS, LAWS AND REGULATIONS (PPPIRC)
website. It is a sample document FOR REFERENCE PURPOSES ONLY and SHOULD NOT BE used as a "model".
  The inclusion of any legal materials on the PPPIRC website does not mean that they are in any way approved,
 endorsed or recommended by the World Bank Group or its affiliates. Legal advice should be sought to determine
whether a particular legal document is appropriate for any given project, and how the specific terms of the document
                              should be adapted to fit the circumstances of that project

     TABLE OF CONTENTS
     ARTICLE 1 - CONTRACT AND INTERPRETATION .................................................................................. 2
        1.1      DEFINITIONS......................................................................................................................................... 2
        1.2      CONTRACT DOCUMENTS ...................................................................................................................... 3
        1.3      INTERPRETATION .................................................................................................................................. 4
           1.3.1    Language ........................................................................................................................................ 4
           1.3.2    Persons ........................................................................................................................................... 4
           1.3.3    Headings ......................................................................................................................................... 4
           1.3.4    Singular or Plural ........................................................................................................................... 4
           1.3.5    Entire Agreement ............................................................................................................................ 4
           1.3.6    Amendment ..................................................................................................................................... 4
           1.3.7    Independent Contractor .................................................................................................................. 4
           1.3.8    Joint Venture or Consortium .......................................................................................................... 5
           1.3.9    Non-waiver ..................................................................................................................................... 5
           1.3.10      Severability ................................................................................................................................ 5
           1.3.11      Number of Days ......................................................................................................................... 5
           1.3.12      References to Currency .............................................................................................................. 5
           1.3.13      Rate of Interest ........................................................................................................................... 6
           1.3.14      Survival of Obligations .............................................................................................................. 6
           1.3.15      Section References ..................................................................................................................... 6
        1.4      NOTICES ............................................................................................................................................... 6
        1.5      LAW GOVERNING CONTRACT............................................................................................................... 7
        1.6      LOCATION ............................................................................................................................................ 7
        1.7      AUTHORITY OF MEMBER IN CHARGE ................................................................................................... 7
        1.8      AUTHORIZED REPRESENTATIVES ......................................................................................................... 7
        1.9      TAXES, DUTIES, CUSTOMS, LEVIES AND CHARGES .............................................................................. 7
           1.9.1    Management Fixed Fee and Performance Incentive Compensation .............................................. 7
           1.9.2    Procurement by the Operator ......................................................................................................... 8
        1.10     ASSIGNMENT ........................................................................................................................................ 8
     ARTICLE 2 - TERM COMMENCEMENT, COMPLETION, AND TERMINATION OF CONTRACT .. 8
        2.1          EFFECTIVENESS OF CONTRACT............................................................................................................. 8
        2.2          EXPIRATION OF CONTRACT .................................................................................................................. 9
        2.3          COMMENCEMENT OF SERVICES ............................................................................................................ 9
           2.3.1       Starting Date ................................................................................................................................... 9
        2.4          SERVICES AFTER THE END DATE ......................................................................................................... 9
        2.5          EXTENSION OF THE CONTRACT ............................................................................................................ 9
        2.6          FORCE MAJEURE ................................................................................................................................ 10
           2.6.1       General ......................................................................................................................................... 10
           2.6.2       No Breach of Contract .................................................................................................................. 10
           2.6.3       Measures to be Taken ................................................................................................................... 11
           2.6.4       Extension of Time ......................................................................................................................... 11
           2.6.5       Payments ....................................................................................................................................... 11
           2.6.6       Consultation .................................................................................................................................. 11
        2.7          SUSPENSION ....................................................................................................................................... 11
        2.8          TERMINATION .................................................................................................................................... 11
           2.8.1       By the Employer ............................................................................................................................ 11
           2.8.2       Required Notice of Termination – For Cause ............................................................................... 12
           2.8.3       Required Notice of Termination – For Convenience .................................................................... 12
           2.8.4       By the Operator ............................................................................................................................ 12
           2.8.5       Notice of Termination by the Operator ......................................................................................... 13
           2.8.6       Disputes about Events of Termination .......................................................................................... 13
           2.8.7       Cessation of Services .................................................................................................................... 13


          PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)                                              Victoria Rigby Delmon, LEGPS
          http://www.worldbank.org/ppp                                                                                                                   September 2007
 This AGREEMENT HAS BEEN ANNOTATED AND AMENDED FOR THE PURPOSES OF THE WORLD BANK
INFRASTRUCTURE AND LAW WEBSITE. It is a sample document FOR REFERENCE PURPOSES ONLY and
        SHOULD NOT BE used as A "model". The inclusion of any legal materials on the WORLD BANK
     INFRASTRUCTURE AND LAW website does not mean that they are in any way approved, endorsed or
    recommended by the World Bank or its affiliates. Legal advice should be sought to determine whether an
 Agreement is appropriate for any given project and how the specific terms of an agreement must be adapted to
                                      fit the circumstances of that project.




       2.8.8        Payment upon Termination ........................................................................................................... 13
ARTICLE 3 - OBLIGATIONS OF THE OPERATOR .................................................................................. 13
   3.1      GENERAL............................................................................................................................................ 13
      3.1.1    Services and Standard of Performance ......................................................................................... 13
      3.1.2    Service Area .................................................................................................................................. 14
      3.1.3    Facilities ....................................................................................................................................... 14
   3.2      LAW GOVERNING SERVICES ............................................................................................................... 14
   3.3      CONFLICT OF INTEREST ...................................................................................................................... 14
      3.3.1    Operator not to Benefit from Commissions, Discounts or Similar Payments ............................... 14
      3.3.2    Operator and Affiliates Disqualification ...................................................................................... 15
      3.3.3    Prohibition of Conflicting Activities ............................................................................................. 15
   3.4      CONFIDENTIALITY .............................................................................................................................. 15
   3.5      LIABILITY OF THE OPERATOR ............................................................................................................. 15
   3.6      INSURANCE TO BE TAKEN OUT BY THE OPERATOR ............................................................................ 16
   3.7      CONTRACT RECORDS, ACCOUNTING AND AUDITING ......................................................................... 17
      3.7.1    Contract Records .......................................................................................................................... 17
      3.7.2    Accounting .................................................................................................................................... 17
      3.7.3    Auditing Contract Records ........................................................................................................... 18
   3.8      SUBCONTRACTORS ............................................................................................................................. 18
   3.9      MEETINGS .......................................................................................................................................... 18
   3.10     REPORTING OBLIGATIONS .................................................................................................................. 18
   3.11     EQUIPMENT AND MATERIALS FURNISHED BY THE EMPLOYER ........................................................... 19
   3.12     PROCUREMENT PLANS AND PRACTICES.............................................................................................. 19
      3.12.1      General .................................................................................................................................... 19
      3.12.2      Day to Day Operations Procurement....................................................................................... 19
      3.12.3      Operating Investment Fund – Procurement ............................................................................. 19
      3.12.4      The Annual Operating Investment Fund Plan .......................................................................... 19
   3.13     COLLECTION AND HANDLING OF REVENUES ...................................................................................... 20
   3.14     PERFORMANCE SECURITY .................................................................................................................. 21
ARTICLE 4 - OPERATOR’S MANAGEMENT STAFF, OPERATIONS STAFFING AND
OPERATIONS AND MAINTENANCE COSTS ............................................................................................. 21
   4.1          GENERAL – MANAGEMENT STAFF...................................................................................................... 21
   4.2          REMOVAL OR REPLACEMENT OF MANAGEMENT STAFF ..................................................................... 21
   4.3          OPERATOR’S RESIDENT PROJECT MANAGER ...................................................................................... 22
   4.4          OPERATIONS STAFFING ...................................................................................................................... 22
   4.5          OPERATIONS AND MAINTENANCE BUDGETS ...................................................................................... 22
ARTICLE 5 - OBLIGATIONS OF THE EMPLOYER.................................................................................. 22
   5.1    ASSISTANCE AND EXEMPTIONS .......................................................................................................... 22
   5.2    ACCESS TO LAND ............................................................................................................................... 23
   5.3    FACILITIES, MUNICIPAL DEVELOPMENT PROJECT MANAGEMENT UNIT, OPERATIONS STAFF, AND
   EQUIPMENT AND MATERIALS ........................................................................................................................... 23
   5.4    PAYMENT ........................................................................................................................................... 24
   5.5    MUNICIPAL DEVELOPMENT PROJECT MANAGEMENT UNIT ................................................................ 24
   5.6    REVIEWS AND APPROVALS OF SUBMISSIONS ...................................................................................... 24
ARTICLE 6 - COMPENSATION TO BE PAID TO THE OPERATOR ..................................................... 24
   6.1      MANAGEMENT STAFF COSTS ............................................................................................................. 24
   6.2      COMPENSATION TO BE PAID TO THE OPERATOR ................................................................................. 25
      6.2.1   Compensation to be Paid .............................................................................................................. 25

     PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)                                             Victoria Rigby Delmon, LEGPS
     http://www.worldbank.org/ppp                                                                                                                  September 2007
 This AGREEMENT HAS BEEN ANNOTATED AND AMENDED FOR THE PURPOSES OF THE WORLD BANK
INFRASTRUCTURE AND LAW WEBSITE. It is a sample document FOR REFERENCE PURPOSES ONLY and
        SHOULD NOT BE used as A "model". The inclusion of any legal materials on the WORLD BANK
     INFRASTRUCTURE AND LAW website does not mean that they are in any way approved, endorsed or
    recommended by the World Bank or its affiliates. Legal advice should be sought to determine whether an
 Agreement is appropriate for any given project and how the specific terms of an agreement must be adapted to
                                      fit the circumstances of that project.




      6.2.2   Management Fixed Fee ................................................................................................................ 25
      6.2.3   Performance Incentive Compensation .......................................................................................... 25
   6.3      PAYMENT ........................................................................................................................................... 25
      6.3.1   Payment of Management Fixed Fee.............................................................................................. 25
      6.3.2   Payment of the Performance Incentive Compensation ................................................................. 26
   6.4      CURRENCY AND EXCHANGE RATES ................................................................................................... 26
   6.5      CHANGE IN CONTRACT ELEMENTS ..................................................................................................... 27
ARTICLE 7 - FAIRNESS AND GOOD FAITH .............................................................................................. 27
   7.1          GOOD FAITH....................................................................................................................................... 27
   7.2          OPERATION OF THE CONTRACT .......................................................................................................... 27
ARTICLE 8 - SETTLEMENT OF DISPUTES ............................................................................................... 28
   8.1          AMICABLE SETTLEMENT .................................................................................................................... 28
   8.2          RIGHT TO ARBITRATION ..................................................................................................................... 28
   8.3          SELECTION OF ARBITRATORS ............................................................................................................. 28
   8.4          RULES OF PROCEDURE ....................................................................................................................... 29
   8.5          SUBSTITUTE ARBITRATORS ................................................................................................................ 29
   8.6          NATIONALITY AND QUALIFICATIONS OF ARBITRATORS ..................................................................... 29
   8.7          MISCELLANEOUS ................................................................................................................................ 29




     PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)                                             Victoria Rigby Delmon, LEGPS
     http://www.worldbank.org/ppp                                                                                                                  September 2007
 This AGREEMENT HAS BEEN ANNOTATED AND AMENDED FOR THE PURPOSES OF THE WORLD BANK
INFRASTRUCTURE AND LAW WEBSITE. It is a sample document FOR REFERENCE PURPOSES ONLY and
        SHOULD NOT BE used as A "model". The inclusion of any legal materials on the WORLD BANK
     INFRASTRUCTURE AND LAW website does not mean that they are in any way approved, endorsed or
    recommended by the World Bank or its affiliates. Legal advice should be sought to determine whether an
 Agreement is appropriate for any given project and how the specific terms of an agreement must be adapted to
                                      fit the circumstances of that project.




                                    Appendix 1
                           Contract Particulars Appendix




                                       CONTRACT PARTICULARS
                                            APPENDIX 1 TO
                                      GENERAL CONDITIONS FOR A
                                      MANAGEMENT CONTRACT FOR
                                       THE PROVISION OF WATER
                                      AND WASTEWATER SERVICES




    PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)   Victoria Rigby Delmon, LEGPS
    http://www.worldbank.org/ppp                                                                        September 2007
 This AGREEMENT HAS BEEN ANNOTATED AND AMENDED FOR THE PURPOSES OF THE WORLD BANK
INFRASTRUCTURE AND LAW WEBSITE. It is a sample document FOR REFERENCE PURPOSES ONLY and
        SHOULD NOT BE used as A "model". The inclusion of any legal materials on the WORLD BANK
     INFRASTRUCTURE AND LAW website does not mean that they are in any way approved, endorsed or
    recommended by the World Bank or its affiliates. Legal advice should be sought to determine whether an
 Agreement is appropriate for any given project and how the specific terms of an agreement must be adapted to
                                      fit the circumstances of that project.




                  CONTRACT PARTICULARS APPENDIX
[NOTE TO BIDDERS: DO NOT FILL IN THE BLANKS IN THIS APPENDIX. THE
APPENDIX WILL BE COMPLETED PRIOR TO THE EXECUTION OF THE
CONTRACT.]
1.1        Supplementing the General Conditions
                    The Contract Particulars Appendix shall supplement the General Conditions.
1.2                 Definitions
          (1)       With respect to GC Section 1.1 the following shall apply:
                                       1.       the Starting Date shall be __________________.
1.3                 Notices
          (1)       With respect to GC Section 1.4 the following shall apply:
                                       2.       the address for the Employer shall be:
                             Name:
                          Address:




                    the address for the Operator shall be:
                             Name:
                          Address:




1.4                 Authority of Member in Charge
          (1)       With respect to GC Section 1.7 the following shall apply:
                                       3.       the Member in Charge shall be:
                             Name:
                          Address:




      PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)   Victoria Rigby Delmon, LEGPS
      http://www.worldbank.org/ppp                                                                        September 2007
 This AGREEMENT HAS BEEN ANNOTATED AND AMENDED FOR THE PURPOSES OF THE WORLD BANK
INFRASTRUCTURE AND LAW WEBSITE. It is a sample document FOR REFERENCE PURPOSES ONLY and
        SHOULD NOT BE used as A "model". The inclusion of any legal materials on the WORLD BANK
     INFRASTRUCTURE AND LAW website does not mean that they are in any way approved, endorsed or
    recommended by the World Bank or its affiliates. Legal advice should be sought to determine whether an
 Agreement is appropriate for any given project and how the specific terms of an agreement must be adapted to
                                      fit the circumstances of that project.




1.5                 Authorized Representatives
          (1)       With respect to GC Section 1.8 the following shall apply:
                                       4.       the Authorized Representative for the Employer shall
                                                be:
                             Name:
                          Address:




                                       5.       the official designate of the Employer’s Authorized
                                                Representative shall be:
                             Name:
                          Address:




                                       6.       the Authorized Representative for the Operator shall be:
                             Name:
                          Address:




                                       7.       the official designate of the Operator’s Authorized
                                                Representative shall be:
                             Name:
                          Address:




      PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)   Victoria Rigby Delmon, LEGPS
      http://www.worldbank.org/ppp                                                                        September 2007
 This AGREEMENT HAS BEEN ANNOTATED AND AMENDED FOR THE PURPOSES OF THE WORLD BANK
INFRASTRUCTURE AND LAW WEBSITE. It is a sample document FOR REFERENCE PURPOSES ONLY and
        SHOULD NOT BE used as A "model". The inclusion of any legal materials on the WORLD BANK
     INFRASTRUCTURE AND LAW website does not mean that they are in any way approved, endorsed or
    recommended by the World Bank or its affiliates. Legal advice should be sought to determine whether an
 Agreement is appropriate for any given project and how the specific terms of an agreement must be adapted to
                                      fit the circumstances of that project.




    PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPIRC)   Victoria Rigby Delmon, LEGPS
    http://www.worldbank.org/ppp                                                                        September 2007

								
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